If the highest price is zero, there is no market, and mining would cease.

I do not believe that expending a ton of energy every block regardless of the number of transactions on it means that it's unreasonable or inaccurate to criticize the energy usage in terms of the number of transactions that it on-average supports through that energy expenditure.

I get into this below, but pretty much any system that expends energy to perform a task can be made to act like Bitcoin and expend constant energy regardless of usage by just leaving it running all the time. Doing that doesn't get rid of the "how much energy per-transaction is Bitcoin using" question.

I guess some people have taken issue with the car analogy, so I'll use another: If I leave my shower running 24/7, does that mean that the amount of water I use divided by the number of showers I take is no longer relevant to conversations about my water usage and whether my showering system is water-efficient? No, of course those questions are still relevant, leaving the shower on constantly just makes those numbers really bad for me.

Or yet another analogy, if you're doing math on whether to keep an Amazon Prime subscription, how do you determine if the subscription is worthwhile? Typically, you would add up the number of things you order, and you might say something like, "I'm on average with my current usage paying <subscription cost>/<orders> dollars per-order for same-day delivery using Amazon Prime." And if Amazon jumped in and said, "no, that metric isn't applicable because you'll still pay the same amount with a different number of orders", we would pretty much all recognize that as a bad argument.

Bitcoin has a maximum block size. The fact that in theory people could transact more or less isn't really relevant to the cost/benefit calculation that we're doing right now. Yes, in theory Bitcoin could have max block sizes of 500mb instead of a single megabyte. But it doesn't.

So with the numbers we have now, it is reasonable to say that each Bitcoin transaction cost us 2.5 months worth of household power, even if Bitcoin would have used that power anyway. If the volume of transactions went down, the numbers would be even worse. Bitcoin is currently a system where we can collectively as a society get ~7 transactions per second at the cost of 2.5 months worth of household power for each transaction. I think that phrasing and critique is entirely accurate, and I don't think that the details of the blockchain change anything about that critique or its implications.

Particularly when Bitcoin's energy usage is often compared against much larger financial systems as a way of excusing its excesses, it is entirely appropriate to point that Bitcoin is currently much less efficient than those systems. And breaking things down and looking at the amount of energy per transaction is a reasonable way of determining the network's current efficiency.

[0] Which is a presumption that is extremely arguable given how much we've seen shutdowns/restarts of coal-powered plants in for instance China and Kazakhstan impact the Bitcoin mining pools over time.

Agreed, that's definitely a possibility, and that would improve energy usage. However, it would also make the network more vulnerable to 51% attacks, and if Bitcoin were to have enough value to actually replace a financial market, it would need a lot of miners to secure that value or it likely lose that value.

But... quibbles aside, you are completely correct that if mining stops being profitable then fewer people will mine, and that is also the correct answer for how to deal with Bitcoin's energy usage. Bitcoin miners will use as much much energy as it is profitable for them to use, and the only way to make that energy usage go down other than banning crypto would be to decrease the profitability of mining (ie, by keeping transaction fees and payouts low and by reducing other mining rewards) -- and that could be accomplished through either reducing the rewards, moving to another system like PoS that removes the miners entirely, or by Bitcoin's price crashing.

No, not unless the energy consumption when taking into account actual average usage is lower than a car where the consumption is tied directly to the same level of usage.

If you really believe that constant rate O(1) is always superior to usage-based consumption, then send me $3000 a month for your electricity bill regardless of how much power you use. Of course, Bitcoin still has an upper limit on how many transactions per-second it can fulfill, so similarly you would still have an upper limit on how much electricity you can use throughout each month.

But, you'd pay $3000 to me regardless of whether you had your fridge running or not, so technically the fridge is now free to run, right?

If my car burns 30 gallons of gas every week regardless of how much I drive, then that'd be pretty damn bad considering I work from home and drive <15 miles per week on average. The fact that I could then drive a 2,000+ mile road trip and still only burn that 30 gallons doesn't make it good if I never make a road trip like that.

Specifically, mining exists to ensure that if you send me Bitcoin, I can be quite confident you haven't sent the same Bitcoin to somebody else. All that expenditure is there to guarantee nobody double spends. It facilitates trustworthy transactions.

Now, it's fair to say that in a way, that also protects people who are just sitting on their Bitcoin not transacting it, since their Bitcoin wouldn't be worth anything if they didn't believe that they could transact if they wished to. But the literal, direct purpose of mining is to protect people receiving Bitcoin in trade, not people sitting on it, who are protected from theft by the secrecy of their private keys.

Transactions may not be the only purpose of Bitcoin, but they are essential to the existence and security of Bitcoin. The block rewards for mining drop by half every few years and will eventually drop to zero. Soon, miners will be paid by transaction fees.

As Satoshi Nakamoto reportedly said: "In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes. I’m sure that in 20 years there will either be very large transaction volume or no volume."

Have you run the math on this? A quick DDG search brings up (https://www.investopedia.com/tech/how-much-worlds-money-bitc...), which estimates about 2.9% of the world's money supply is in Bitcoin.

It's not clear whether they estimated how much of that money supply is actually still accessible (ie, how many dead wallets there are), and it's not a given that all of that money could actually be cashed out anyway (see the recent stablecoin fiascos). But lots of asset classes are vulnerable to runs, so let's assume that it's completely accurate, and Bitcoin is using all this power to meaningfully secure 2.9% of the world's money.

In order to secure that 2.9% of the money, Bitcoin generates more e-waste than a mid-sized country and uses roughly the same amount of energy as the entire country of Sweden every single year. And the problem is that even the most generous estimations of the amount of power that current financial markets use make that energy expenditure look really inefficient. Even pro-Bitcoin articles that I find online (ex. https://news.bitcoin.com/banking-system-uses-significantly-m...) are estimating that gold and banks each use in the neighborhood of 2-4x more power than Bitcoin annually. Which is a little bit embarrassing given that Investopedia above suggests that Bitcoin secures less than 10% the amount of money that gold secures. Similarly, it's tough to estimate how much money is held inside the financial sector (and of course, banks do way more than just secure value), but nobody I can find is giving estimates as low as 6-12%, instead I'm seeing some estimates as high as 25%.

I would not really classify gold as an environmentally amazing asset, but when considering gold we're still looking at a store of value that per-year is basically 2-5x more energy efficient per "dollar-secured" than Bitcoin is.

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And I feel like this should honestly be kind of intuitive to people, if anything people should be surprised that those numbers aren't worse. Bitcoin's design is such that it uses electricity proportional to the amount of profit available from mining. Until the mining rewards drop to zero, as Bitcoin rises in value the energy/hardware expenditure will also rise to match that value. If it doesn't then the value of the coin will eventually get high enough to make 51% attacks profitable.

So take a step back and think about that: a system that keeps its assets secure via a constant, massive expenditure of energy, that has to grow in energy expenditure as the price of the asset increases, and that has to be maintained in perpetuity in order to win an ever-escalating computing arms race against attackers... well, that's not a system that's exactly setting itself up to be an amazingly efficient store of value. It's not surprising that more traditional methods of running and securing databases and coordinating databases/transactions would be more efficient. It's not surprising that even a mostly physical asset would be more efficient to secure.

But, bitcoin mining at flare gas sites disconnected from the grid is a significant source of the amount of energy being used bitcoin mining, and this use reduces pollution and emission over 60%, and it takes away from nothing else. And if there was any vigilance towards proof of work it should be to ensure more of this happens, and less of other sources. because obviously the flaring isn't going to stop, and the proof of work isn't going to stop, so lets focus on the parts you can influence.

Here is a US general Wesley Clarke explaining in his own words in 2000, before 9/11, how the US was already planning to invade 7 countries, all of whom had the nerve to act outside USD hegemony and some of which had the audacity to run their own central banks outside the approved system.

https://m.youtube.com/watch?v=6Knt3rKTqCk

You compared Bitcoin’s energy use to nation states. I compared it with hair dryers and one nation’s military, while pointing out that the US military’s energy consumption was only a small portion of it’s fully loaded cost in terms of externalities (others being: death, destruction, fossil fuel usage greater than any other entity to ever exist)

Again, no moving of goalposts. Simply fair comparisons of different forms of money.

Bitcoin never claimed to replace all uses of USD or gold, but it does reduce the total external costs in many important ways while providing the world with a powerful new alternative that is peer to peer, can be self-custodied, and has a fixed low inflation rate from now to infinity making it harder money than any that has ever existed.

Bitcoin isn't scalable and part of the point I'm getting at is that its power consumption is out of control and would be even more out of control if it did rise in importance, since the price would rise and mining would increase to compensate.

You're asking me to imagine a world where Bitcoin has grown in the amount of value it's securing (which necessarily because Bitcoin is a deflationary asset requires that the price of Bitcoin increase dramatically), but you're also asking me to substitute in the current energy requirements of Bitcoin when I think about that world.

In a world where Bitcoin actually held a substantial portion of the world's value, the amount of energy required to actually secure that system against 51% attacks would be ridiculous, it would dwarf the energy requirements of any other financial system.

> To my knowledge most internet based p2p networks do rely on the internet

A lot of P2P applications are about allowing direct connections between devices even if the Internet goes down. But more importantly, when most people think about P2P they're thinking about systems where you don't need fast consensus. The blockchain is a distributed ledger that forces constant consensus. In contrast, if you look at something like (just as one example) P2P Matrix you can run rooms entirely offline, and essentially you can run rooms that don't immediately propagate their state to the entire rest of the network. They might never connect to the rest of the Matrix world.

One of the big advantages of P2P is the idea that you don't need to have access to the entire network. But Bitcoin fails that test, if you don't have at least indirect access to the entire network and you can't get your changes onto the chain in time, then it's too late.

This is part of what people mean when they say that Bitcoin is kind of like a decentralized way of running a centralized service. Bitcoin relies on a having a nearly always up-to-date shared consensus of everyone's transactions. It gets at the shared consensus in a decentralized way, but there is still one centralized "state" that everyone is relying on. The really interesting work in P2P networks does not rely on constant consensus or on having one singular state at all. A true P2P cryptocurrency in the way that most people understand P2P networks today (or at least the good P2P networks) wouldn't have the blockchain. It wouldn't require a single unified ledger that contained every block.

> It is like valuing the inflation of the gold supply based on the speculative nature of gold in USD fiat, rather than the gold supply itself.

Okay, but that's a ridiculous thing to do because if you think about inflation only in those terms then your inflation numbers don't really indicate how much value the asset is actually worth. But if you believe otherwise, I might have some Beanie Babies somewhere to sell you.

> This is a statement without substance that I fundamentally disagree with. Please provide evidence or back down on such baseless accusations

:) Crud, my evidence is the entire heckin history of Bitcoin, the fact that it is not being used primarily for transactions today even though a lot of the early proponents were arguing that it would be. My evidence is the "all" view on this price chart (https://www.coinbase.com/price/bitcoin). That is not the chart of a functioning currency.

The question of whether a deflationary asset was good as a currency got brought up a lot during early Bitcoin talks, and the answer that was often given was that other forces would come into play and people wouldn't just sit on their Bitcoin and treat it the same way they treat stocks. But it didn't happen, people do basically just sit on their Bitcoin the same way they sit on stocks. It turns out that when an asset experiences rapid growth, that's bad for its use-case as a currency.

Which, I mean... obviously. You're not on here arguing that Bitcoin is primarily about transactions, are you? You're arguing that it should be thought of like a bank vault. Early Bitcoin proponents back when I first entered the space were arguing differently. They turned out to be wrong. Bitcoin today is the evidence that deflationary assets are inherently poorly suited for currencies.

> Agree, but I did provide a couple examples where Bitcoin is a superior medium of exchange today than Gold or USD.

I'm not entirely unreasonable, there are some very minor things that Bitcoin does well. Most of them are done better by other cryptocurrencies, and it says something that the community continues to focus on a cryptocurrency that has been technologically obsoleted by other coins multiple times over, but even so, there are some things the coin does well.

But there aren't very many things, and my point is that the energy costs are too high to justify with those minor improvements. Bitcoin is not meaningfully changing the game on censorship for most people (even though that's what Bitcoin does best). It is not reducing military presence in the world. It isn't really democratizing finance in the way its proponents claim. And it introduces huge environmental costs and tons of negative externalities in exchange for such tiny, insignificant gains.

> If you are going to focus singularly on the transaction use case, over the store of value use-case, I will call you out as missing the point.

Cool, Bitcoin is garbage at both transactions and as a store of value. Mathematically, it's worse than the other systems we have at both of those tasks. Now, you are telling me to ignore that math because the existing systems also have a ton of separate externalities, and I actually agree with you that the existing systems have a ton of externalities.

But if you are arguing that Bitcoin is going to do anything about those externalities, then it needs to get a whole lot more usable and whole lot more efficient at being both a store of value and a method of transactions. Otherwise, I don't really care about the carbon emissions of the military in regards to Bitcoin because Bitcoin isn't going to do anything to reduce them.

Pointing out that existing systems are bad does not make Bitcoin magically good. Bitcoin is an ineffective way of addressing systemic problems with existing currencies, and yet it still imposes large environmental and social costs of its own.

I'm supposed to ignore the massive environmental costs of transactions and the lack of scaling, and yet somehow believe that Bitcoin will be able to meaningfully compete with any other currency. It won't, not unless it gets better at transactions. I'm supposed to ignore that Bitcoin's energy cost to secure money is out of control, but I'm also supposed to believe that it will outcompete gold in any meaningful way. It won't because it's bad at storing value. It can't address the negative externalities of gold because it's mathematically worse than gold at the primary purpose of storing value, and the other negative externalities of gold are not going to help Bitcoin compete with gold.

It's not enough to realize that gold and fiat money have problems, the alternative that you propose still has to actually work better than them.

> Infinity/21 million is better than 1/infinity (exponential inflationary money supply) over the long term.

Not if you're building a currency :)

> The only reason you don’t understand that yet is that you haven’t sufficiently studied Bitcoin. I encourage you to do so.

Oh please, I've been in this space for ages, I've gone to the talks, I've read the papers, I've learned the algorithms. I know the early economic theories that Bitcoin proponents were proposing back when it first started to break out of extreme niche circles, because I one-on-one talked to early proponents about how they thought this was going to work out and asked them questions about how they thought a deflationary asset would work as a currency. It was an interesting idea, and I was hoping that they would be correct. But they turned out to be wrong and their predictions about usage and human behavior on the network didn't actually come true. That's all there is to it.

Part of the reason I'm cynical about Bitcoin is because I'm not coming into Bitcoin discussions through the lens of revisionist history, and I'm not coming into Bitcoin discussions from a perspective that the technology must just magically have some way of dealing with scalability or efficiency problems. I've spent enough time studying both the technology and the economic theories, and I've spent enough time just sitting back and watching the space evolve, that I now know behind the complexity there are fundamental assumptions being made about how currencies work that are just... incorrect.

I wish they were correct, a decentralized currency would be great. But I'm not sticking my head in the sand and pretending that Bitcoin is capable of being that currency.

This is unbelievably silly, you might as well say that they were targeted because they had the audacity to use different languages than English when they were selling oil. Their use of a currency other than USD was not the actual fundamental reason the US got mad at them, it was just a way that those countries moved their oil markets outside of US control.

The reason the US opposed those countries was because of who they were selling the oil to and to assert control over the oil market in general. Countries used other currencies other than USD in order to avoid US control. But the avoidance of US control was the part that the US was primarily mad about, not the specific currency involved. If USD went away, the US would not suddenly say, "we never cared about control in the first place, just the USD, so now you can sell oil to whoever you want and we won't pay attention to it."

The US would still oppose the countries selling oil to Bitcoin addresses that they didn't like. They would still want to target exchanges, they would still mark coins as dirty or get mad at countries who accepted coins from banned addresses or allowed dirty coins to transact, and they would still threaten countries that used techniques to try and anonymize who they were selling oil to or launder coins.

It's not about the USD, it's about the market. The USD just happens to be what the market uses right now, but the US government would still be "protective" of its market even if it used a different currency.

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I'm trying to come up with an analogy here that makes it more obvious what the error is that you're making... it's like saying that the USD is responsible for all bank heists because criminals in the US mostly target banks that are carrying primarily USD money, and if all banks switched to Bitcoin then criminals would stop trying to steal from any banks. It's like saying that most website fingerprinting happens in Javascript, and that can't be a coincidence, so if browsers used C++ for site scripting instead of Javascript then fingerprinting would go away.

But of course that would be ridiculous. Bank robbers want money, and they won't stop wanting money just because the money is in a different form. They're not targeting banks because they love USD specifically and uniquely, they're targeting banks because they want spendable money, and they would still want spendable money even if that money was Bitcoin.

And similarly, the US wants control over the oil market itself, and it will not stop wanting control over the oil market just because the oil is all being sold for a different currency. If the US switches to Bitcoin, it is still going to get mad at countries that are participating in markets outside of its control, because the USD is just a way that the US exerts control over markets, not the primary reason why it exerts control over markets.